British Pound Technical Price Outlook: GBP/USD Weekly Trade Levels
- Sterling technical trade level update – Weekly Chart
- GBP/USD contracting into support at April opening-range lows- breakout pending
- Weekly resistance 1.3245/71, 1.3398, 1.3529 (key) – Support 1.3006(key),~1.2870s, 1.2754
The Sterling slump continues with the British Pound down for five of the past six daysagainst the US Dollar. The decline takes price back towards support at the monthly range lows and we’re looking for a breakout in the days ahead for guidance. These are the updated targets and invalidation levels that matter on the GBP/USD weekly chart. Review my latest Strategy Webinar for an in-depth breakdown of this Sterling technical setup and more.
British Pound Price Chart – GBP/USD Weekly
Notes: In last month’s Sterling Technical Forecast we noted that, “The Sterling breakdown has reached the first major support pivot and we’re looking for a reaction off this mark for guidance.” GBP/USD continues to hold above support at the 1.618% Fibonacci extension of the decline off the yearly high at 1.3006 with the April opening-range still preserved heading into the final week. Look to the breakout for near-term directional bias here.
A downside break / weekly close sub-1.30 would be needed to mark resumption of the broader downtrend with such a scenario exposing subsequent support objectives at the lower parallel (currently ~1.2870s) and the 2016 low-week close / 2019 yearly open at 1.2754– both levels of interest for possible downside exhaustion IF reached. Initial weekly resistance eyed at the median-line (currently ~1.3210s) backed by a more prominent technical confluence at 1.3245/71 and the January low close at 1.3398– a breach / close above this threshold would be needed to suggest a more significant low is in place with broader bearish invalidation steady at the 2022 yearly open at 1.3529.
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Bottom Line: The British Pound is contracting just above support within the monthly opening-range- the battle lines are drawn heading into the April close. From a trading standpoint, the immediate focus is on a breakout with the broader risk still weighted to the downside while below downtrend resistance at the median-line. Rallies should be capped by 1.3271 IF price is heading lower on this stretch. I’ll publish an updated Sterling Price Outlook once we get further clarity on the near-term GBP/USD technical trade levels.
British Pound Trader Sentiment – GBP/USD Price Chart
- A summary of IG Client Sentiment shows traders are net-long GBP/USD – the ratio stands at +2.76 (73.41% of traders are long) – typically bearish reading
- Long positions are 1.94% lower than yesterday and 10.55% higher from last week
- Short positions are 3.41% lower than yesterday and 2.72% lower from last week
- We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests GBP/USD prices may continue to fall. Traders are further net-long than yesterday and last week, and the combination of current positioning and recent changes gives us a stronger GBP/USD-bearish contrarian trading bias from a sentiment standpoint.
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Previous Weekly Technical Charts
— Written by Michael Boutros, Technical Strategist with DailyFX
Follow Michael on Twitter @MBForex